Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Thirteen ten, do wuiba and ask the experts with Wisconsin
Capital Management online whizcap dot com. That's wiscap dot com.
I hope if you've had a chance to check out
the website, if you haven't been there recently or haven't
been there yet, definitely head on over there today. That's
wiscap dot com. Of course, you can learn more about
(00:26):
Wisconsin Capital Management, what makes them so unique, all the
great things that they can do for you. It's a
great day to learn more and of course start that
conversation at wizcap dot com. Joining us this morning from
Wisconsin Capital Management as Nathan Plumb. Nathan, of course is
as an executive MBA and also a serfied trust financial
planner as well as a portfolio manager at Wisconsin Capital Management. Nathan,
(00:47):
how you doing this week? Wow?
Speaker 2 (00:50):
Great to hear you with Sean.
Speaker 1 (00:51):
It's great to talk with you. And wow, we've got
we've got some really cool stuff to talk about. As
always on the program, real quick bill before we get rolling,
of course, I'm sud you are with Wisconsin Capital Management.
Let's just real quick talk about with Wisconsin Capital Management,
of course, started by your father Tom, who is who's
taking so much time away from needed time away from
(01:11):
the from the show. This week, let's talk a little
bit about the background of Wisconsin Capital Management and how
you got your start.
Speaker 2 (01:18):
Yeah, I started in two thousand and three, March ten,
two thousand and three, but that was a little worried
about nepotism I started the business. So I started as
an assistant trust officer, and there you had the fun
jobs of like locking people's doors after like they're gone,
and clearing out assets and it's getting your literally your
(01:39):
hands dirty. Yeah, but I ended up, you know, learning
that stuff from working my web. I ended up getting
assigned small accounts to manage. I'd end up doing well
on those and so on that I started it put
me as a portfolio manager on our proprietary mutual fund
in two thousand and thirteen, and yeah, then that's my
(02:01):
main focus ever since.
Speaker 1 (02:02):
That is awesome to hear, and it's good. It's good
to get a little bit of get your hands dirty
a little bit here and there and kind of learn
a little bit about the business. Interestingly enough, we're going
to be talking about things like succession and and what
that all involves when it comes to uh comes to
your business. Before we get to that too, I want
to ask you also, Nathan. Of course you are you
have an executive MBA. You're also a Certified Trust Financial Advisor.
(02:24):
Let's talk about your MBA. You you're a badger, right,
do I remember that correctly?
Speaker 2 (02:28):
Yep, I'm a proud business badger. So yeah, I went
to Granger Hall, had a wonderful experience out there, learned
from some of the top professors in the country, and
also almost as importantly my cohorts from my class. I'm
still very close with many of them and still see
them and talk to me on occasion.
Speaker 1 (02:47):
Well, that's great. Here, we won't talk about the football
team this week. We're gonna leave it.
Speaker 2 (02:51):
Dah, We'll skip that one.
Speaker 1 (02:52):
Well, so this week we are going to be shifting
focus to business owners, specifically those you know who are
who are thinking about selling or exiting their business. Let's
kind of walk through that process, Nathan and kind of
get some of those key steps that folks can can
be taking to to really maximize that value from all
those years of hard work.
Speaker 2 (03:12):
Yeah. So it's a unique time for a business owner
when you're kind of like I'm thinking about retiring or
need to put in steps, someone give me an offer
a night, or get the steps and the logistical steps
of selling the business, and then you know what am
I going to do afterward? How do I plan for
my family? So yeah, we I was constantly had capital
help at all and so that process.
Speaker 1 (03:34):
You were talking earlier about about some of your early
days at Wisconsin Capital Management, and you know, one of
the things that's important is you know, keeping good records,
keeping good books, keeping track of that type of stuff.
And really, when it comes to trying to evaluate a business,
one of the things potential buyers are going to be
looking at is at your records, is like how well,
not only how well is the business performing, but I'm
(03:55):
going to guess how well did you keep track of
those type of things? Right?
Speaker 2 (03:59):
That is incredibly important and it sounds so simple, but
I really can't stress enough is that you really need
to treat your business almost like a separate person. So
that means it has to have a separate check account,
has to have it separate text workers, has to have
a separate corporate credit card. So it's completely kind of
(04:19):
different from yourself. So it's kind of easy that people
are alas to get a little softy with the books,
and you end up really kind of hurting your valuation
because no one really trusts your kind of ad hoc
or let me fix the books type stuff. So I
cannot stress being very almost like OCD clear and on
your book. So it's a slip up that even large
(04:40):
companies make, you.
Speaker 1 (04:41):
Know, Nathan, as we talk about that area too, I
think for a lot of folks, maybe those who maybe
they didn't keep the greatest of books over time, kind
of manage things day to day, kind of making their
own calls and didn't really establish things well as far
as as far as what their business behind the scenes
is all about, in what it is that's marketable. And
I think a lot of those folks end up saying
(05:03):
maybe I'll just liquidate and we'll just we'll call it
a day. There is value in business, and some of
it has to do with this we're just talking keeping
good records, straightening things up. But it's really important to
find out what that value is because I think sometimes
people might be surprised all those years of equity and
labor that were put into it can be quite valuable
to potential suitors and buyers, can't it.
Speaker 2 (05:25):
Yeah, that's a great point that these business owners have
been working their business so long that they just really
can't imagine someone else buying their business or buying a
part of their business. And you actually see this all
the time. So people just kind of like, oh, I'm done,
I'm going to sell their office fronture, close the door,
close off the lights, and leave. And there actually might
(05:47):
be some valuable things to sell in that business that
they never really think about. So most businesses are sellable
or have parts that sellable. And I can't stress that enough.
So and you know a lot of business owners that
common things that they miss is that they're really their
lists of clients or lists of their vendors that they
work with are often very available to someone else. So
(06:10):
I think that is the important things to realize that
there's often something to sell, not just liquidate.
Speaker 1 (06:15):
That's pretty amazing too. I think sometimes we because we
you know, we're working so closely with this stuff. For example,
you mentioned no vendors or clients, those type of things,
we tend to overlook them as a pretty valuable asset.
And at the end of the day, that's really what
we're doing, is we're is we're working with our vendors.
We're working with our clients, and we're working with with
with the other customers, and that's really what at the
(06:37):
end of the day, what we're doing is we're logistically
moving things whatever it is between those three areas. What about,
as we talked this morning with Nathan Plumb of Wisconsin
Capital Management Online with cap dot com that's wiscap dot com.
What about when it comes to knowing and understanding your
business as far as the values there and the multiples there.
(06:59):
There there's a lot to know. Also is depending on
your field, it's going to be judged, engaged and priced
a little bit differently, isn't it.
Speaker 2 (07:07):
Yeah, that's exactly right. So you kind of have to
know what multiple your business sells for. Is so often
if you have a business that has reoccurring revenue, those
are often valued higher than a business that, like a
shot there were people would just buy things once at
so and so those businesses have different what they call
multiples in our business. So, for example, if your business
(07:32):
made ten thousand dollars a year and the industry standard
was two times revenue, right, so that means a regular
or all parks slag price to your business is roughly
twenty thousand dollars as example.
Speaker 1 (07:45):
Talking this morning with Nathan Plumb of Wisconsin Capital Management
the website wizcap dot com. That's wiscap dot com. Nathan,
one of the things I've learned from you and your
dad Tom over the over these past few programs is
planning is essential. And I've got to guess that this
area is something as well that you want to have
a plan in place, and part of that plan is
(08:06):
having a timeline. What should folks be thinking about as
far as as far as kind of that timeline for
let's say I want to retire and you know, sooner
or later, what point should I start looking into this stuff?
Speaker 2 (08:19):
Yeah, so I think in my NBA text was I
tell you should start to plan your business five to
ten years before you actually sell the business. But in
the real world it seems like, you know, you should
always kind of be ready to sell, and you kind
of need a team to do that. So you have
to have a make sure you have a good CPA
or a good account, and also probably either have be
(08:39):
friends or become friends quickly a with a lawyer that
specializes in these kind of things, usually called the mergers
and acquisitions lawyer, and they often shorten their name in
to M and A lawyer.
Speaker 1 (08:51):
Those guys, I've met a few of those guys and
gals they are. They're a fun bunch for sure, very
useful bunch though, and definitely very much by the way
as we talk to about some of the some of
the financial and some of the you know, some of
the I hate to phrase this way, but some of
the cold numbers. There's also an emotional part to this,
isn't there, Nathan, Where you know, you've spent years and years,
(09:12):
hours and hours days, and you know, missing kids, sporting events,
or or other things in your life to really grow
this this business. We tend to forget that there is
a pretty significant emotional connection to that, isn't there.
Speaker 2 (09:28):
Yeah. You probably know those wall business owners and their
business almost becomes part of their identity and part of
their personality, right, So trying to bifurcate or disassociate the
personality from the business is often kind of hard to do,
not just the business owner often doesn't realize it. So
that's kind of a period that you really need professionals
(09:50):
to come in and be an assistant, part of a team.
You recommend not doing that alone. There's many ways to
sell your businesses, many way to sell your business from
a tax advantage way, like with a help with that
account and an m and a lawyer, and you know,
the psychologically it's hard to you're often uh, it's often
very stressful for your your loved ones and your families
(10:12):
as well. So that's something that you know, actually wet
Whiskap really helped smooth over. And that's what something someone
people really appreciate about us.
Speaker 1 (10:22):
Do you see and it's a little off the cuff,
but it kind of popped away there. Do you see
oftentimes business owners offering to maybe stick around as maybe uh,
you know, as a liaison or a consultant, just to
be like, hey, I'll if you need me, I'll become
an employee at my former business or become available for
for limited limited needs. Do you see that oftentimes where
(10:44):
it's kind of hard to completely step away and some
of these business owners saying, hey, listen, if if you've
got a spot for me, I'd like to kind of
stick around a little bit.
Speaker 2 (10:53):
Yeah, I've definitely seen that, and I've seen that if
you're hang on a little bit, I've seen that work well.
It has to be real structured and with a new
new owner, and I've seen it work poorly as well,
So you just have to make sure it's structure, make
sure everything sent up the lines. If you have something
that's really hard that can't step back from the day
(11:13):
to day, you're going to kind of struggle. And I'd
recommend probably just trying to make sure that you have
a time dexit, to make sure you have a timeline
on that, Otherwise you're going to end up making things
a lot harder on yourself.
Speaker 1 (11:25):
And Nathan, you mentioned of course working with the CPA
and of course an m and attorney. We're going to
get a little bit more into that as far as
the stratch tax strategy for your exit and how to
kind of handle that. We'll do that in just a moment.
I was going to ask you also while we're still
in this area, just about talking about the sale itself.
I hear things like ESOPs and other things as well.
There's I think people might be in business owners might
(11:48):
be surprised at all of the different options and opportunities
that may be out there for potential buyers.
Speaker 2 (11:55):
You're exactly right, Sean. So when you're sign your business.
You don't have to sell for cash, and it's actually
pretty rare someone pulls up with a dump truck of
money and uh just jumps thatt at your door. So
often these things are structured in different ways. There's a
multiple way of selling your business. So you can sell
to your employees sometimes that's the best route. That's the
(12:17):
ESOP that you mentioned. Sometimes it's doing in installment, stand
sales and so just kind of buying over time. There's
there's so many different ways and each business is a
little bit different. So h and if the right planning,
it's the right documents, the right contract, you can make
your workout.
Speaker 1 (12:35):
Doggan this morning with Nathan Plum with Wisconsin Capital Management.
The website whizcap dot com. That's w y s c
ap dot com. Great website to get to know Nathan,
Tom and the whole team at Wisconsin Capital Management. Again,
that website whiz cap dot com, that's w y s
c ap dot com. Talked a little bit about kind
of having that plan in place. We're going to talk
(12:57):
with Nathan about having a plan a little bit more
about that exit things for preparation wise, as far as
getting ready for that off ramp we'll get the details
from Nathan. We will do that next as ask the
Experts with Wisconsin Capital Management continues right here on thirteen
ten Wi b A. Thirteen ten w I b A
(13:22):
and asked the Experts with Wisconsin Capital Management online wizcap
dot com. That's Wi s c ap dot com, wiz
cap dot com. Ipe. You get a chance to day
to stop on buy the website again. A lot of
great information. You can learn more about Nathan, Tom and
the whole team at Wisconsin Capital Management. You can also
set up an appoyment right on the website wizcap dot com.
(13:43):
That's Wi s c ap dot com. Talking this week
about selling your business and it is something that can
be done. There are steps to be taken, things to
be aware of as you make that as you make
that transition. And of course, Nathan, as we talked this morning,
you know you've run that good business. What do you
want to do then as you as you near that exit.
Speaker 2 (14:05):
Yeah, so the thing is really to get a professional
team together and wisconds of caple of management who're off
the team. So you want someone that will give you
financial advice and not incentivized to sell you things. So
just having that third party to talk to you, talk
to your partner, talk to your family is and just
kind of explain how things are going to work and
(14:27):
way they can anticipate and then everyone will you know,
not be shocked and make some you know, poor decisions.
So you know, and it's also a lot of people
in they sell their business, especially in this area, they
really kind of philanthropic and they really want to donate
to causes that they're passionate about. And there's if you
sell your business, you know, sometimes there's a lump sum
(14:49):
and you can't use all those charity you can only
use that once. And so often there's things called like
donor advice funds that you could put money into, and
that way you can make sure that you're giving the
charities that you want over time and and make things
like annual donations to the charities that you really care about.
Speaker 1 (15:07):
Any of the ability to change. So let me ask
you about that. You talk about things like those donor
advise funds. So are the think really talking legacy at
that point, aren't we?
Speaker 2 (15:15):
Nathan, Yeah, exactly. So you're making sure that you're the
things that you want to happen actually happen. So but
there are a lot of pitfalls. There's a lot of
horror straws out there, and we can actually touch on
a few of those if you want.
Speaker 1 (15:31):
Yeah, let's let's say, let's say a funny, funny thing.
I actually, yeah, let's talk a little bit about that
kind of dig in on some of those areas that
folks need to be keen on if they're looking to sell.
Speaker 2 (15:41):
Yeah, so often you're a little bit jubilant after selling
your business. So there's some things that you've seen and
a couple of things that you can think about and
hopefully avoid. One is the obvious, right, so often you know,
buying some you know, oversized trophy purchase as they say
in the industry, so you know the Lamborghini, the yacht
(16:01):
and stuff like that when you've not had that lifestyle before.
So that's the obviously a pin fall, and I don't
I think that's pretty self evident. But you know, the
other ones are kind of things that often I see
more often. So often it's you know, some friends and
family coming with you an investment. They're like, oh, I
want you to start in my restaurant and things like that,
(16:22):
and you kind of know them and stuff like that,
but often that is a real big pitfall as well.
So there are a lot of people saying, oh, now
I know that you're rich, and can you help me?
And it's really nice to have the third party like
us to intervene so that way you don't have to
be the one that says no or maybe or I
need to structure it this way. So that's one other
(16:42):
pitfall to have. Then, Also people run across this one
a lot. Is a lot of the hot tips, right,
so you're out the golf course or you're out with
your dinner with your friends, like, oh, I have this
great cryptocurrency, you have this great penny stock, I got
this private investment that's super and you should get part
of it too. So you'll hear a lot of pitches
(17:04):
like that if you sell your business. And again, that's
really nice to have a third party intermediary like us
just to kind of handle that kind of stuff.
Speaker 1 (17:12):
Then I was gonna say, yeah, one of the things
I've heard you mentioned before is is lifestyle greep as well.
Speaker 2 (17:18):
What is it?
Speaker 1 (17:18):
What is that? What is what's that about?
Speaker 2 (17:21):
Yeah, so that's what you're like, you know, I'm so
lucky and I feel so generous. I'm not. I'm going
to pay off you know, by my my my mother
a house, I'm going to buy kind of pay off
all the kids debts, going to pay off all my
grandchildren's debts, and you know, pay some of my friend's debts,
(17:42):
and actually doing that without any kind of financial planning beforehand.
You often see this happen a lot with a lottery winners, actually,
and so that's something that really is a pitfall that's
really easy to get in. And then probably the last
one I probably see is that that, uh, it's almost
like a mindset that since I sold this business, I
(18:03):
can do this again, and you kind of forget how
hard it was. Running your business is kind of like
the good Old times type psychological trap you get into
and ends up being really really hard. There's often a
lot of hubrious and saying, oh I was successful once
and I could do anything again and so but yeah,
so there's a lot of ways that you could fall,
(18:24):
and that's why having a financial advisor like us is
really important just to kind of either bounce to ideas
off or to even kind of you know, hear financial bodyguard.
Speaker 1 (18:34):
As you mentioned, having that neutral third party is really
great to have as well. As we talked this morning
with Nathan Plumb with Wisconsin Capital Management online with cap
dot com. That's wiscap dot com. Before we wrap up
this week, Nathan, let's kind of wrap things up nicely
and just kind of close everything out, and let's talk
about Wisconsin Capital Management and some of the value there
(18:55):
when it comes to business owners and for them looking
to reach out to you. Let's talk little bit about
what you guys can provide at Wisconsin Capital Management. Nathan.
Speaker 2 (19:04):
Yeah, also the financial expertise. But I think the most
feedback we get is as how much we try to
educate both our clients and their partners and their families.
And so, you know, if you're it's one thing trying
to explain things to your spouse financially, and that's one
thing to have go through third party like us and
have things explain. So it seems to be a lot
(19:24):
more comprehension and you kind of know that they're taking
care of in case you're not around and they're not
know what's going on financially. And so that's the one
part that we I really excel at.
Speaker 1 (19:37):
That's great, it's great to hear and it's great to
think about too. I know, you know, we started this
conversation this week, Nathan, talking about the work that goes
into building a business and the sacrifices that are made
and and and actually seeing some some you know, an
opportunity there for you to maybe do something great for
yourself your family, to be generous as well, but making
sure that it's done smart and that there are some
(19:58):
great opportunities with that. It's being of great opportunities. What
a day it is. Head on over to wizcap dot com.
That's wy s c ap dot com. Take this opportunity
to learn more about Wisconsin Capital Management. If you're interested
in making appointment, you can do that right online. You
can learn more at wizcap dot com. That's Wi s
c ap dot com. Nathan, it's always great chatting with you.
You have a fantastic day, and we'll do it all
(20:20):
again real soon.
Speaker 2 (20:21):
All right, and again, don't keep sloppy books.
Speaker 1 (20:26):
Yeah, the financial people. That stuff drives you guys crazy.
I know. Again that website whizcap dot com, that's Wi
s c ap dot com. News comes your way next
right here on thirteen ten, w I b A
Thirteen ten, do wuiba and ask the experts with Wisconsin
Capital Management online whizcap dot com. That's wiscap dot com.
I hope if you've had a chance to check out
the website, if you haven't been there recently or haven't
been there yet, definitely head on over there today. That's
wiscap dot com. Of course, you can learn more about
(00:26):
Wisconsin Capital Management, what makes them so unique, all the
great things that they can do for you. It's a
great day to learn more and of course start that
conversation at wizcap dot com. Joining us this morning from
Wisconsin Capital Management as Nathan Plumb. Nathan, of course is
as an executive MBA and also a serfied trust financial
planner as well as a portfolio manager at Wisconsin Capital Management. Nathan,
(00:47):
how you doing this week? Wow?
Speaker 2 (00:50):
Great to hear you with Sean.
Speaker 1 (00:51):
It's great to talk with you. And wow, we've got
we've got some really cool stuff to talk about. As
always on the program, real quick bill before we get rolling,
of course, I'm sud you are with Wisconsin Capital Management.
Let's just real quick talk about with Wisconsin Capital Management,
of course, started by your father Tom, who is who's
taking so much time away from needed time away from
(01:11):
the from the show. This week, let's talk a little
bit about the background of Wisconsin Capital Management and how
you got your start.
Speaker 2 (01:18):
Yeah, I started in two thousand and three, March ten,
two thousand and three, but that was a little worried
about nepotism I started the business. So I started as
an assistant trust officer, and there you had the fun
jobs of like locking people's doors after like they're gone,
and clearing out assets and it's getting your literally your
(01:39):
hands dirty. Yeah, but I ended up, you know, learning
that stuff from working my web. I ended up getting
assigned small accounts to manage. I'd end up doing well
on those and so on that I started it put
me as a portfolio manager on our proprietary mutual fund
in two thousand and thirteen, and yeah, then that's my
(02:01):
main focus ever since.
Speaker 1 (02:02):
That is awesome to hear, and it's good. It's good
to get a little bit of get your hands dirty
a little bit here and there and kind of learn
a little bit about the business. Interestingly enough, we're going
to be talking about things like succession and and what
that all involves when it comes to uh comes to
your business. Before we get to that too, I want
to ask you also, Nathan. Of course you are you
have an executive MBA. You're also a Certified Trust Financial Advisor.
(02:24):
Let's talk about your MBA. You you're a badger, right,
do I remember that correctly?
Speaker 2 (02:28):
Yep, I'm a proud business badger. So yeah, I went
to Granger Hall, had a wonderful experience out there, learned
from some of the top professors in the country, and
also almost as importantly my cohorts from my class. I'm
still very close with many of them and still see
them and talk to me on occasion.
Speaker 1 (02:47):
Well, that's great. Here, we won't talk about the football
team this week. We're gonna leave it.
Speaker 2 (02:51):
Dah, We'll skip that one.
Speaker 1 (02:52):
Well, so this week we are going to be shifting
focus to business owners, specifically those you know who are
who are thinking about selling or exiting their business. Let's
kind of walk through that process, Nathan and kind of
get some of those key steps that folks can can
be taking to to really maximize that value from all
those years of hard work.
Speaker 2 (03:12):
Yeah. So it's a unique time for a business owner
when you're kind of like I'm thinking about retiring or
need to put in steps, someone give me an offer
a night, or get the steps and the logistical steps
of selling the business, and then you know what am
I going to do afterward? How do I plan for
my family? So yeah, we I was constantly had capital
help at all and so that process.
Speaker 1 (03:34):
You were talking earlier about about some of your early
days at Wisconsin Capital Management, and you know, one of
the things that's important is you know, keeping good records,
keeping good books, keeping track of that type of stuff.
And really, when it comes to trying to evaluate a business,
one of the things potential buyers are going to be
looking at is at your records, is like how well,
not only how well is the business performing, but I'm
(03:55):
going to guess how well did you keep track of
those type of things? Right?
Speaker 2 (03:59):
That is incredibly important and it sounds so simple, but
I really can't stress enough is that you really need
to treat your business almost like a separate person. So
that means it has to have a separate check account,
has to have it separate text workers, has to have
a separate corporate credit card. So it's completely kind of
(04:19):
different from yourself. So it's kind of easy that people
are alas to get a little softy with the books,
and you end up really kind of hurting your valuation
because no one really trusts your kind of ad hoc
or let me fix the books type stuff. So I
cannot stress being very almost like OCD clear and on
your book. So it's a slip up that even large
(04:40):
companies make, you.
Speaker 1 (04:41):
Know, Nathan, as we talk about that area too, I
think for a lot of folks, maybe those who maybe
they didn't keep the greatest of books over time, kind
of manage things day to day, kind of making their
own calls and didn't really establish things well as far
as as far as what their business behind the scenes
is all about, in what it is that's marketable. And
I think a lot of those folks end up saying
(05:03):
maybe I'll just liquidate and we'll just we'll call it
a day. There is value in business, and some of
it has to do with this we're just talking keeping
good records, straightening things up. But it's really important to
find out what that value is because I think sometimes
people might be surprised all those years of equity and
labor that were put into it can be quite valuable
to potential suitors and buyers, can't it.
Speaker 2 (05:25):
Yeah, that's a great point that these business owners have
been working their business so long that they just really
can't imagine someone else buying their business or buying a
part of their business. And you actually see this all
the time. So people just kind of like, oh, I'm done,
I'm going to sell their office fronture, close the door,
close off the lights, and leave. And there actually might
(05:47):
be some valuable things to sell in that business that
they never really think about. So most businesses are sellable
or have parts that sellable. And I can't stress that enough.
So and you know a lot of business owners that
common things that they miss is that they're really their
lists of clients or lists of their vendors that they
work with are often very available to someone else. So
(06:10):
I think that is the important things to realize that
there's often something to sell, not just liquidate.
Speaker 1 (06:15):
That's pretty amazing too. I think sometimes we because we
you know, we're working so closely with this stuff. For example,
you mentioned no vendors or clients, those type of things,
we tend to overlook them as a pretty valuable asset.
And at the end of the day, that's really what
we're doing, is we're is we're working with our vendors.
We're working with our clients, and we're working with with
with the other customers, and that's really what at the
(06:37):
end of the day, what we're doing is we're logistically
moving things whatever it is between those three areas. What about,
as we talked this morning with Nathan Plumb of Wisconsin
Capital Management Online with cap dot com that's wiscap dot com.
What about when it comes to knowing and understanding your
business as far as the values there and the multiples there.
(06:59):
There there's a lot to know. Also is depending on
your field, it's going to be judged, engaged and priced
a little bit differently, isn't it.
Speaker 2 (07:07):
Yeah, that's exactly right. So you kind of have to
know what multiple your business sells for. Is so often
if you have a business that has reoccurring revenue, those
are often valued higher than a business that, like a
shot there were people would just buy things once at
so and so those businesses have different what they call
multiples in our business. So, for example, if your business
(07:32):
made ten thousand dollars a year and the industry standard
was two times revenue, right, so that means a regular
or all parks slag price to your business is roughly
twenty thousand dollars as example.
Speaker 1 (07:45):
Talking this morning with Nathan Plumb of Wisconsin Capital Management
the website wizcap dot com. That's wiscap dot com. Nathan,
one of the things I've learned from you and your
dad Tom over the over these past few programs is
planning is essential. And I've got to guess that this
area is something as well that you want to have
a plan in place, and part of that plan is
(08:06):
having a timeline. What should folks be thinking about as
far as as far as kind of that timeline for
let's say I want to retire and you know, sooner
or later, what point should I start looking into this stuff?
Speaker 2 (08:19):
Yeah, so I think in my NBA text was I
tell you should start to plan your business five to
ten years before you actually sell the business. But in
the real world it seems like, you know, you should
always kind of be ready to sell, and you kind
of need a team to do that. So you have
to have a make sure you have a good CPA
or a good account, and also probably either have be
(08:39):
friends or become friends quickly a with a lawyer that
specializes in these kind of things, usually called the mergers
and acquisitions lawyer, and they often shorten their name in
to M and A lawyer.
Speaker 1 (08:51):
Those guys, I've met a few of those guys and
gals they are. They're a fun bunch for sure, very
useful bunch though, and definitely very much by the way
as we talk to about some of the some of
the financial and some of the you know, some of
the I hate to phrase this way, but some of
the cold numbers. There's also an emotional part to this,
isn't there, Nathan, Where you know, you've spent years and years,
(09:12):
hours and hours days, and you know, missing kids, sporting events,
or or other things in your life to really grow
this this business. We tend to forget that there is
a pretty significant emotional connection to that, isn't there.
Speaker 2 (09:28):
Yeah. You probably know those wall business owners and their
business almost becomes part of their identity and part of
their personality, right, So trying to bifurcate or disassociate the
personality from the business is often kind of hard to do,
not just the business owner often doesn't realize it. So
that's kind of a period that you really need professionals
(09:50):
to come in and be an assistant, part of a team.
You recommend not doing that alone. There's many ways to
sell your businesses, many way to sell your business from
a tax advantage way, like with a help with that
account and an m and a lawyer, and you know,
the psychologically it's hard to you're often uh, it's often
very stressful for your your loved ones and your families
(10:12):
as well. So that's something that you know, actually wet
Whiskap really helped smooth over. And that's what something someone
people really appreciate about us.
Speaker 1 (10:22):
Do you see and it's a little off the cuff,
but it kind of popped away there. Do you see
oftentimes business owners offering to maybe stick around as maybe uh,
you know, as a liaison or a consultant, just to
be like, hey, I'll if you need me, I'll become
an employee at my former business or become available for
for limited limited needs. Do you see that oftentimes where
(10:44):
it's kind of hard to completely step away and some
of these business owners saying, hey, listen, if if you've
got a spot for me, I'd like to kind of
stick around a little bit.
Speaker 2 (10:53):
Yeah, I've definitely seen that, and I've seen that if
you're hang on a little bit, I've seen that work well.
It has to be real structured and with a new
new owner, and I've seen it work poorly as well,
So you just have to make sure it's structure, make
sure everything sent up the lines. If you have something
that's really hard that can't step back from the day
(11:13):
to day, you're going to kind of struggle. And I'd
recommend probably just trying to make sure that you have
a time dexit, to make sure you have a timeline
on that, Otherwise you're going to end up making things
a lot harder on yourself.
Speaker 1 (11:25):
And Nathan, you mentioned of course working with the CPA
and of course an m and attorney. We're going to
get a little bit more into that as far as
the stratch tax strategy for your exit and how to
kind of handle that. We'll do that in just a moment.
I was going to ask you also while we're still
in this area, just about talking about the sale itself.
I hear things like ESOPs and other things as well.
There's I think people might be in business owners might
(11:48):
be surprised at all of the different options and opportunities
that may be out there for potential buyers.
Speaker 2 (11:55):
You're exactly right, Sean. So when you're sign your business.
You don't have to sell for cash, and it's actually
pretty rare someone pulls up with a dump truck of
money and uh just jumps thatt at your door. So
often these things are structured in different ways. There's a
multiple way of selling your business. So you can sell
to your employees sometimes that's the best route. That's the
(12:17):
ESOP that you mentioned. Sometimes it's doing in installment, stand
sales and so just kind of buying over time. There's
there's so many different ways and each business is a
little bit different. So h and if the right planning,
it's the right documents, the right contract, you can make
your workout.
Speaker 1 (12:35):
Doggan this morning with Nathan Plum with Wisconsin Capital Management.
The website whizcap dot com. That's w y s c
ap dot com. Great website to get to know Nathan,
Tom and the whole team at Wisconsin Capital Management. Again,
that website whiz cap dot com, that's w y s
c ap dot com. Talked a little bit about kind
of having that plan in place. We're going to talk
(12:57):
with Nathan about having a plan a little bit more
about that exit things for preparation wise, as far as
getting ready for that off ramp we'll get the details
from Nathan. We will do that next as ask the
Experts with Wisconsin Capital Management continues right here on thirteen
ten Wi b A. Thirteen ten w I b A
(13:22):
and asked the Experts with Wisconsin Capital Management online wizcap
dot com. That's Wi s c ap dot com, wiz
cap dot com. Ipe. You get a chance to day
to stop on buy the website again. A lot of
great information. You can learn more about Nathan, Tom and
the whole team at Wisconsin Capital Management. You can also
set up an appoyment right on the website wizcap dot com.
(13:43):
That's Wi s c ap dot com. Talking this week
about selling your business and it is something that can
be done. There are steps to be taken, things to
be aware of as you make that as you make
that transition. And of course, Nathan, as we talked this morning,
you know you've run that good business. What do you
want to do then as you as you near that exit.
Speaker 2 (14:05):
Yeah, so the thing is really to get a professional
team together and wisconds of caple of management who're off
the team. So you want someone that will give you
financial advice and not incentivized to sell you things. So
just having that third party to talk to you, talk
to your partner, talk to your family is and just
kind of explain how things are going to work and
(14:27):
way they can anticipate and then everyone will you know,
not be shocked and make some you know, poor decisions.
So you know, and it's also a lot of people
in they sell their business, especially in this area, they
really kind of philanthropic and they really want to donate
to causes that they're passionate about. And there's if you
sell your business, you know, sometimes there's a lump sum
(14:49):
and you can't use all those charity you can only
use that once. And so often there's things called like
donor advice funds that you could put money into, and
that way you can make sure that you're giving the
charities that you want over time and and make things
like annual donations to the charities that you really care about.
Speaker 1 (15:07):
Any of the ability to change. So let me ask
you about that. You talk about things like those donor
advise funds. So are the think really talking legacy at
that point, aren't we?
Speaker 2 (15:15):
Nathan, Yeah, exactly. So you're making sure that you're the
things that you want to happen actually happen. So but
there are a lot of pitfalls. There's a lot of
horror straws out there, and we can actually touch on
a few of those if you want.
Speaker 1 (15:31):
Yeah, let's let's say, let's say a funny, funny thing.
I actually, yeah, let's talk a little bit about that
kind of dig in on some of those areas that
folks need to be keen on if they're looking to sell.
Speaker 2 (15:41):
Yeah, so often you're a little bit jubilant after selling
your business. So there's some things that you've seen and
a couple of things that you can think about and
hopefully avoid. One is the obvious, right, so often you know,
buying some you know, oversized trophy purchase as they say
in the industry, so you know the Lamborghini, the yacht
(16:01):
and stuff like that when you've not had that lifestyle before.
So that's the obviously a pin fall, and I don't
I think that's pretty self evident. But you know, the
other ones are kind of things that often I see
more often. So often it's you know, some friends and
family coming with you an investment. They're like, oh, I
want you to start in my restaurant and things like that,
(16:22):
and you kind of know them and stuff like that,
but often that is a real big pitfall as well.
So there are a lot of people saying, oh, now
I know that you're rich, and can you help me?
And it's really nice to have the third party like
us to intervene so that way you don't have to
be the one that says no or maybe or I
need to structure it this way. So that's one other
(16:42):
pitfall to have. Then, Also people run across this one
a lot. Is a lot of the hot tips, right,
so you're out the golf course or you're out with
your dinner with your friends, like, oh, I have this
great cryptocurrency, you have this great penny stock, I got
this private investment that's super and you should get part
of it too. So you'll hear a lot of pitches
(17:04):
like that if you sell your business. And again, that's
really nice to have a third party intermediary like us
just to kind of handle that kind of stuff.
Speaker 1 (17:12):
Then I was gonna say, yeah, one of the things
I've heard you mentioned before is is lifestyle greep as well.
Speaker 2 (17:18):
What is it?
Speaker 1 (17:18):
What is that? What is what's that about?
Speaker 2 (17:21):
Yeah, so that's what you're like, you know, I'm so
lucky and I feel so generous. I'm not. I'm going
to pay off you know, by my my my mother
a house, I'm going to buy kind of pay off
all the kids debts, going to pay off all my
grandchildren's debts, and you know, pay some of my friend's debts,
(17:42):
and actually doing that without any kind of financial planning beforehand.
You often see this happen a lot with a lottery winners, actually,
and so that's something that really is a pitfall that's
really easy to get in. And then probably the last
one I probably see is that that, uh, it's almost
like a mindset that since I sold this business, I
(18:03):
can do this again, and you kind of forget how
hard it was. Running your business is kind of like
the good Old times type psychological trap you get into
and ends up being really really hard. There's often a
lot of hubrious and saying, oh I was successful once
and I could do anything again and so but yeah,
so there's a lot of ways that you could fall,
(18:24):
and that's why having a financial advisor like us is
really important just to kind of either bounce to ideas
off or to even kind of you know, hear financial bodyguard.
Speaker 1 (18:34):
As you mentioned, having that neutral third party is really
great to have as well. As we talked this morning
with Nathan Plumb with Wisconsin Capital Management online with cap
dot com. That's wiscap dot com. Before we wrap up
this week, Nathan, let's kind of wrap things up nicely
and just kind of close everything out, and let's talk
about Wisconsin Capital Management and some of the value there
(18:55):
when it comes to business owners and for them looking
to reach out to you. Let's talk little bit about
what you guys can provide at Wisconsin Capital Management. Nathan.
Speaker 2 (19:04):
Yeah, also the financial expertise. But I think the most
feedback we get is as how much we try to
educate both our clients and their partners and their families.
And so, you know, if you're it's one thing trying
to explain things to your spouse financially, and that's one
thing to have go through third party like us and
have things explain. So it seems to be a lot
(19:24):
more comprehension and you kind of know that they're taking
care of in case you're not around and they're not
know what's going on financially. And so that's the one
part that we I really excel at.
Speaker 1 (19:37):
That's great, it's great to hear and it's great to
think about too. I know, you know, we started this
conversation this week, Nathan, talking about the work that goes
into building a business and the sacrifices that are made
and and and actually seeing some some you know, an
opportunity there for you to maybe do something great for
yourself your family, to be generous as well, but making
sure that it's done smart and that there are some
(19:58):
great opportunities with that. It's being of great opportunities. What
a day it is. Head on over to wizcap dot com.
That's wy s c ap dot com. Take this opportunity
to learn more about Wisconsin Capital Management. If you're interested
in making appointment, you can do that right online. You
can learn more at wizcap dot com. That's Wi s
c ap dot com. Nathan, it's always great chatting with you.
You have a fantastic day, and we'll do it all
(20:20):
again real soon.
Speaker 2 (20:21):
All right, and again, don't keep sloppy books.
Speaker 1 (20:26):
Yeah, the financial people. That stuff drives you guys crazy.
I know. Again that website whizcap dot com, that's Wi
s c ap dot com. News comes your way next
right here on thirteen ten, w I b A
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
CrimeLess: Hillbilly Heist
It’s 1996 in rural North Carolina, and an oddball crew makes history when they pull off America’s third largest cash heist. But it’s all downhill from there. Join host Johnny Knoxville as he unspools a wild and woolly tale about a group of regular ‘ol folks who risked it all for a chance at a better life. CrimeLess: Hillbilly Heist answers the question: what would you do with 17.3 million dollars? The answer includes diamond rings, mansions, velvet Elvis paintings, plus a run for the border, murder-for-hire-plots, and FBI busts.